Iowa Court of Appeals Defense Ruling
The Iowa Court of Appeals recently affirmed a summary judgment granted to Patterson Law Firm client Mid-Century Insurance Company in a declaratory judgment action seeking a determination no insurance coverage existed under an “all risk” policy for a loss caused by sand boils. See MGM Apartments, LLC v. Mid-Century Ins. Co., Case No. 03-1022 (Iowa Ct. App., Jan. 23, 2014). Patterson Law Firm attorneys Jason W. Miller and Harry Perkins III represented Mid-Century Insurance Company and asserted an “earth movement” exclusion precluded coverage for the loss despite an exception to the exclusion for a “sinkhole collapse”. As is typical, the insurance policy indicated all terms in quotation marks had special meaning. Significantly, the term “sinkhole collapse” was placed in quotation marks when defined in the policy, but was not placed in quotation marks when used in the exception to the earth movement exclusion. The effect of omitting quotations marks when using a term with a special meaning had not previously been addressed by any Iowa court. The insured argued terms not placed in quotation marks must be given their plain and ordinary meaning, even where they were otherwise defined in the policy. Mr. Miller and Mr. Perkins successfully argued that the term sinkhole collapse as used in the earth movement exclusion should be given its special meaning even though it was not placed in quotation marks when used in the applicable exception. In so doing, Mr. Miller and Mr. Perkins advanced, and the Iowa Court of Appeals adopted, the reasoning of the Oregon Court of Appeals in the case of Ruede v .City of Florence, 220 P.3d 113, 117 (Oregon Ct. App. 2009).